Thursday, December 25, 2008

No LIBOR News Today Due to Christmas Day Holiday

New York and London markets are closed for the Christmas Day holiday, so there is no LIBOR or TED spread-related news today.

There will be no LIBOR news tomorrow, December 26, as London markets will be closed for the Boxing Day holiday. TED spread-related news will be posted here tomorrow.

The yield on the 13-week U.S. Treasury Bill is 0.005%. Therefore, the TED spread is currently 1.4625 percentage points; it was1.4925 last Friday and 4.34 on October 15, 2008. For the TED spread, a figure between zero and 50 basis points (50 basis points = 0.50 percentage point) is a strong indication that the international banking system is normal and healthy.

A Eurodollar is a U.S. dollar deposited in any bank outside the United States, and therefore not subject to regulation by the U.S. Federal Reserve. U.S. dollars deposited in a London bank are Eurodollars, as are U.S. dollars deposited in a bank in e.g. Tanzania.

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